بسم الله الرحمن الرحيم
Hizb
ut-Tahrir Wilayah Pakistan has issued the following Publicized Policy Position
(PPP) which clearly demonstrates how Islam’s revenue and
expenditure policies can lead to economic strength and prosperity by adopting
Hizb ut-Tahrir constitution for the Khilafah.
A. PREAMBLE:
Economic
strength is not possible either through Democracy or Dictatorship. Both forms
of ruling are corrupt as they allow revenues and spending to favor the kafir
colonial powers and their agents who come to rule within Pakistan
Sufficient revenues in the state
treasury are essential for looking after the affairs of the people and managing
the state expenses, such as the armed forces, health and education. However, in
Pakistan's current system, both democracy and dictatorship take turns to secure
the economic interests of the kafir colonialists and a small band of
agent-traitors in the military and political leadership. To achieve this, the
World Bank, IMF in cahoots with the government selectively employs humiliating
policies of taxation and privatization. These policies deprive the population
of public ownership of huge sources of revenue and then leave the people to
take the burden of the expenses of the state, by imposing an entire host of taxes
that choke economic activity and add to the people’s misery usurping what
private wealth they have left. Taxation on buying food, clothing, shelter,
earning, inheritance, administration, health and education, renders them
“luxuries” for the “privileged” few, and not guaranteed needs for all.
Moreover, on the expenses side, the expenditure is primarily to secure the
needs of the kafir colonialists and their agents, leaving the affairs of the
people neglected. This is the reality of Pakistan's revenue and expenditure
under the colonialist system no matter whosoever comes to rule, and regardless
of whether the appearance of the rule is democratic or dictatorship. Pakistani
economic sovereignty was abused in the time of Musharraf-Aziz, it continues to
be abused during the time of Zardari-Kayani and it will continue under the next
club of agent- traitors. And this is because in democracy and dictatorship, men
decide laws according to their whims and desires rather than implementing all
that has been revealed by Allah (swt).
B1.
Depriving the society of revenue from public properties
Capitalism
as implemented by dictatorship and democracy in Pakistan deprives the state and
the general public huge sources of revenue, through privatization of the public
properties, such as oil, gas and electricity. Local and foreign owners of the
oil, gas and electricity assets generate huge revenues and sizeable profits
from these valuable resources. After returning these assets to public
ownership, the future Khilafah can trade in energy resources with foreign
states that are not hostile to the Muslims and Islam. In this and similar ways
the Khilafah will ensure the benefit of this wealth of the Ummah is for the
Ummah itself, rather than becoming a source of misery by allowing private
companies to funnel its wealth away as profits, whilst the government adds to
burdens of the people with huge taxation upon energy. In addition, capitalism's
drive for private ownership also usurps interests that should be owned
primarily by the state, such as machinery and heavy munitions manufacture,
telecommunications, major construction and transport. In the coming Khilafah,
inshaaAllah, such enterprises are primarily to be regarded as state
enterprises, with private companies existing within the field, but under state
supervision so as to prevent usurping, eclipsing and dominating the state role
as occurs in these dark days of capitalism. This is why under capitalism, the
wealthiest companies in the world are energy, arms, machinery and
telecommunications companies, whilst the governments are left with only one
resort, suffocating the people with increased taxation. Moreover, in Pakistan's
case, colonialism through the agent rulers creates incentives to encourage
foreign ownership, such as reduced excise on the import of machinery and other
economic inputs and tax holidays on profits, which are sent back to strengthen
the economy of the foreign country. And the direct foreign usurping of the
Pakistan's manufacturing base, as evident by the government's own Foreign
Direct Investment (FDI) figures, it surged during the Musharraf-Aziz regime and
continues to occur under Kayani-Zardari.
B2.
Strangling most of the people with taxes, whilst only a few thrive
Under IMF
supervision, during the time of Musharraf-Aziz, continuing under Kayani-Zardai,
Pakistan's economy has been strangled by huge taxation on earnings and
consumption of goods. So, consider that total revenues in 1987-88 were Rs.
117,021 million, in 2002/3 they were Rs. 706,100 million and in 2011/12 they
were 2,536,752 million. Of this total, direct taxes, which are income tax,
property tax and corporate tax, were Rs. 12,441 million in 1987-88, then rose
to Rs. 153,072 million in 2002/2 and then again in 2011/12 to Rs. 745,000. This
represents an initial jump in direct taxes, from 10% to over 20% of total
revenues, and then a further rise to 29% under Kayani and Zardari in 2011/12.
Moreover,
income tax alone surged from 17% to 32% of the major state revenues, between
1987-8 and 2002-3. This has meant that the labour forces, blue and white collar
workers, are facing ever greater hardships, with increased taxation eating away
at their wages. As long as this corrupt system remains the situation will
worsen, no matter who comes to power. In 2011-12 the government extracted Rs.
730,000 million in income taxes alone, which is more than the entire revenue
collected in 2002-3. Moreover, in the 2012-13 budgets, the government is now
chasing a target of a staggering Rs. 914,000 million. Yet, the government is
calling for even more taxation, echoing the demands of the Western colonialists,
to choke out the little life left in the economy.
Consider
also indirect taxes, which are excise, tax on international trade, sales tax,
surcharges on gas and petroleum and other taxes such as stamp duties, foreign
travel tax, motor vehicle tax were Rs, 81,015 million in 1987/88 and
then rose to Rs. 397,875 million in 2002/3. Significantly, under the Musharraf-Aziz regime,
within this category, it is sales tax that surged from 9% in 1987/88 to 43% of
the state’s major taxes. It is this sales tax that has made buying medicine,
food, inputs for agriculture and industry unbearable for people, choking their
ability to contribute to the economy and secure basic needs. Such taxation
naturally leads to concentration of wealth in the society in the hands of the few,
as those at the bottom of the ladder are hit hardest, twice, by what they earn
and also what they are able to consume. Over time, this means more collapses
within industry and agriculture, leading to a concentration of wealth in the
hands of a small fraction of the population. And the situation will only worsen
as long as this system remains. In 2011-12, the government extracted Rs.
852,030 million in general sales taxes and in the 2012-13 budget, the target is
Rs. 1,076,500 million.
So after
all, capitalism has ensured that the combined revenues of sales tax and income
tax alone are over 60% of all the state revenues. Which means the major share
of the revenues is from usurping the wages of the people and undermining their
ability to buy essentials. This corrupt system can only produce such failure as
it is designed to neglect the affairs of the people and this is why all those
who seek power in this system are also calling for increased taxation. As
income tax, this system taxes people upon the fruits of their labour from which
they hope to save to secure their basic needs and some of their luxuries,
rather than taxing from their surplus wealth beyond their needs and some of
their luxuries. As sales tax, it taxes the people in their attempts to buy basic
needs and some luxuries, rather than taxing only on those who have wealth in
surplus of such basic needs and luxuries. Yet, the agent-traitors insist this
system is “for the people.” Whereas in the Khilafah, neither income tax nor
sales tax exists because private property in origin is inviolable. Taxation
occurs on surplus wealth beyond that which is needed to secure basic needs and
some luxuries, and that too under stringent conditions. What allows this low
taxation policy is the fact that the Khilafah has abundant sources of revenues
from public and state property, as well as a unique set of laws for revenue
generation from agriculture and industry.
B3.
Expenditure that is biased towards the colonialists and their agents
Having
deprived the Ummah of its rightful revenues and also choked its earnings and
ability to buy and produce, the government then takes interest based loans from
the kafir colonialist countries. These loans are a bunya, designed to keep
Pakistan in debt so as to strip it of its assets and gravely reduce its ability
to stand on its feet as a challenge to the West. Total debt outstanding in
1990-2000 was $15,451 billion, even though the same period the total amount
repaid was $36,111 billion. Over decades Pakistan has paid $3.66 billion every
year, yet has seen its external debts double. And the situation continues to
worsen with every decade. Consider the staggering debt to just one colonialist
institution, at the end of March 2012, debt owed to IMF aggregated up to $8.1
billion, as stated by the Finance Ministry in its publication Pakistan's
Economic Survey. Now Pakistan spends a staggering 35% of its budget on debt
servicing, which represent $11 billion of the $30 billion budget of 2011-2012.
This is money that is taken away from the economy, looking after the affairs
and securing the basic needs of the people. And it is a global injustice, as
like Pakistan, many countries have paid back their loans many times over, but remains
in debt due to interest and unjust colonialist conditions.
C. LEGAL INJUCTIONS: Pertaining to establishing the
economy on a firm footing
C1.
Revenue and expenses overview
Unlike
Capitalism, Islam does not rely on taxation on income and consumption as a
dominant means to generate revenue. Its revenue generation is based on accrued
wealth beyond the basic needs, as well as upon actual production. Even when the
Khilafah does tax, it is with stringent conditions that are based upon
accumulated wealth, so it does not penalize poor and under privileged who are
unable to secure their basic needs. This is possible because partly because of
the huge revenue that the state will generate from state owned and publicly
owned enterprises such as energy resources, machinery and infrastructure
manufacture and partly through Islam's unique revenue laws, which increase
distribution of the wealth, rather than its concentration. Hizb ut-Tahrir
states in its “Introduction to the Constitution,” “Article 148 “The budget of
the State has permanent chapters determined by Shari’ah rules. As for the
sections of the budget, the amounts allocated for each section, and the issues
of each section covered by these amounts are left to the opinion of the
Khalifah and his Ijtihad“ and in Article 149 “The
permanent sources of income for the Bayt al-Mal are the booty, Jizya, land tax,
a fifth of buried treasure, and Zakat. This income is collected continuously
irrespective of whether there was a need or not” and in Article 151 “Money
taken at the borders of the State from custom duties, income derived from
public or State property, inheritance for which there is no inheritor and the
assets of the apostates are all considered to be part of the revenue of the
Bayt al-Mal.”
C2.
Industry as a source of revenue
Industry
will thrive in the Khilafah. It will not be strangled by taxes for all manner
of crucial inputs, from energy to machinery. Instead, the state will generate
revenue from profits of the trade and accrued trading merchandise. This allows
the businesses to focus on production without fetters, whilst circulation is
ensured through their giving of revenues from their profits or accrued wealth.
Hizb ut-Tahrir says in its “Introduction to the Constitution, Article 143
“Zakat is collected from Muslims, and is taken from the wealth which the
Shari’ah has specified such as money, the profits of trade, cattle and grains.
It is not taken from anything which the Shari’ah did not mention. It is taken
from every owner irrespective of whether they were legally
responsible/accountable (mukallaf) such as the mature, sane person or whether
they were not legally responsible such as the child and the insane. The Zakat
is placed in a specific section of the Bayt al-Mal, and is not spent except
upon one or more of the eight categories mentioned in the noble Quran.”
C3.
Agriculture- Kharaaj as a source of revenue does not strangle farmers
Under
Islamic rule, the Indian Subcontinent, a predominately agricultural society,
produced almost a quarter of the world's GDP. One of the factors was the
concept of Kharaj. Under Kharaj, the neck of the land was owned by all the
Muslims, but its use and benefit was with the one who cultivated it. So the one
who cultivated it benefited from its production directly. This allowed the
circulation of wealth and boosted production. In return for a strong source of
livelihood, the Muslims generated revenue from the land for the state, in
accordance to its capacity. With the introduction of capitalism, under the
British rule, the cultivators were taxed heavily, were forced then to take
interest based loans, subsequently drowned in debt and ultimately had to sell
their lands. This was asides from the land seizures by the colonialists for the
sake of themselves and their collaborators. Agriculture continues to suffer
from capitalism until today, even though Pakistan's existing agriculture
remains world class in many fields, and has potential to develop far further.
The farmers face huge taxation on agricultural inputs from fertilizer, seed,
machinery, transport and fuel. Then they are forced to try and increase profits
by exports to foreign markets. This in turn drowns Pakistan in suffering by
forcing it to make more and more expensive imports of the same grains and crops
that it can grow in abundance. In Islam, the revenue generation is not based on
taxation of agricultural inputs, but on production from the land, which enables
the farmer to maximize the production, without being slowed down by
over-expensive inputs. As Hizb ut-Tahrir states in its “Introduction to the
Constitution” in Article 145, “Land
tax is payable upon the kharajiyyah land according to its capacity. Zakat is
collected from the ‘ushriyyah land according to the actual production.”
C4.
Recourse to taxation is with stringent conditions, not a default
Islam
grants sanctity to the private property of individuals and prevents it
usurping, so taxation would occur in the Khilafah, but as a last resort and
under stringent conditions; namely, if the revenues that Shariah has stipulated
were not enough and only upon those who have secured their basic needs and some
of luxuries to the level that is considered normal. So Islam ensures that there
is no taxation on the fruits of labour nor the efforts to secure the basic
needs and luxuries, as occurs in capitalism in the form of income tax and sales
tax, which is punishing the less well off. This means that the taxation will
ensure circulation of wealth, rather than concentration. Consider that Pakistan’s
top 30 richest people are worth circa $15 billion and these are only reported
figures. Just a 30% tax will net $4.5 billion. Thus, the money raised through
the levy of emergency tax on the wealthy can be used to stimulate Pakistan’s
ailing industries. Beyond this the Khilafah can choose to take loans from the
people for projects with repayment expected over short term as well, as asking
for voluntary donations from an Ummah which is characterized by generosity for
the sake of Allah (swt). Hizb ut-Tahrir states in its “Introduction to the
Constitution” in Article 150 “If the
permanent revenues of the Bayt al-Mal are not sufficient to cover the
expenditure of the State, then it is possible to impose taxes upon the Muslims.
It becomes obligatory to impose taxes as follows: a. To fulfil the obligatory
expenses upon the Bayt al-Mal for the poor, needy, and wayfarers, and to
undertake the obligation of Jihad. b. To fulfil the obligatory expenses upon
the Bayt al-Mal for remunerations of the civil servants and soldiers, as well
as compensation for the rulers. c. To fulfil the obligatory expenses upon the
Bayt al-Mal to undertake the services and needs such as establishing roads,
extracting water, building mosques, schools and hospitals. d. To fulfil the
obligatory expenses upon the Bayt al-Mal which are necessary in case of a
disaster which afflicted the subjects such as famine, floods and earthquakes”
and in Article 146 “Muslims
pay the taxes that the Shari’ah has permitted to be levied upon them in order
to cover the expenditure of the Bayt al-Mal, on the condition that it is levied
on that which is surplus to the individual’s needs according to what is normal,
and has to be sufficient to cover the needs of the State. and forbade the
taking of custom duties, because it is a tax, and so it is a prohibition that
encompasses every tax.” and in Article 147 “The State has
the right to impose taxes in order to undertake anything that the Shari’ah
obligated upon the Ummah if the funds in the Bayt al-Mal were insufficient
since the obligation for funding it would be transferred onto the Ummah. The
State has no right to impose a tax for the sake of whatever is not obligatory upon
the Ummah to undertake, and so it is not permitted to collect fees for the
courts or departments or to fulfil any service.”
C5.
Expenditure guidelines
Thus the
Khilafah raises huge revenues from state property, public property, agriculture
and industry without choking them, and taxes from those who have surplus to
normal living. On the expense side Islam stipulates all that is necessary
to truly look after the affairs of the people. And of course, the Khilafah will
not pay any more to the criminal colonialist loaning institutions, firm in the
knowledge that the principal has been paid many times over, as is the case with
many other states. Hizb ut-Tahrir declares in the Introduction to the
Constitution, Article 152 “The
expenditure of the Bayt al-Mal is divided across six sections: a. The eight
categories which deserve the Zakat to be spent upon them, from the chapter of
Zakat. b. The poor, the needy, the wayfarer, Jihad, and those in debt – if
there is nothing found in the chapter of Zakat, they are given money from the
permanent sources of income of the Bayt al-Mal, and if nothing is found then
those in debt are not given anything. Taxes are imposed in order to fulfil the
expenses required for the poor, the needy, the wayfarer, and Jihad, and the
State takes a loan in case of fear of fasad (corruption). c. The individuals
who provide services to the State such as the civil servants, the soldiers and
the rulers are paid from the Bayt al-Mal. If there were insufficient funds in
the Bayt al-Mal then taxes are imposed in order to fulfil the expenditure
needs, and the State takes a loan in case of fear of fasad (corruption). d. The
essential services and utilities such as roads, mosques, hospitals and schools
are funded by the Bayt al-Mal, and if there are insufficient funds in the Bayt
al-Mal taxes are imposed to fulfil these expenses. e. The non-essential
services and utilities are funded by the Bayt al-Mal, and if funds found in the
Bayt al-Mal are insufficient then they are not funded, but rather delayed. f.
Emergency situations such as earthquakes and floods are funded by the Bayt
al-Mal, and if the funds were not found the money required is taken as a loan
immediately which is then repaid through raised taxes.”
Note:
Please refer to the following articles in Hizb ut-Tahrir's Introduction to the
Constitution, for the complete evidences from Quran and Sunnah: 143-152.
To see relevant articles of the constitution for the Khilafah state, please
visit: http://htmediapak.page.tl/policy-matters.htm
D. POLICY:
Revenue generation and expenditure to propel a world leading global power
D1. Great revenues generated through public ownership of
oil, gas and electricity resources as well as prominent state ownership of the
manufacture of machinery and munitions and provision of telecommunications and
transport
D2. Ending taxation on inputs to industry and agriculture,
that choke production. Revenue generation from the profits and accrued
merchandise of industry, as well as from the production from the land
D3. Rejection of the debt to the Western colonialist
institutions, whose loans have been repaid many times over due to the
oppressive interest. Focussing expenditure on the Shar'i needs of the Muslims
and looking after their affairs, including building strong industrial basis,
for strength and prosperity.
Hizb
ut-Tahrir 7
Rabii uth-Thaanee, 1434AH
Wilayah Pakistan
18 February, 2013 CE
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